What changed in this filing

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Item 1. Financial Statements

2021-05-10 compared with 2020-11-13 · 410 added, 621 removed, 123 unchanged (89% of the section changed)

Financial Statements

SPHERIX INCORPORATED)

Consolidated Balance Sheets

in thousands except share and per share amounts)

September 30,

Current assets

2 unchanged sentences

Prepaid expenses and other assets

Short-term investment

Total current assets

Convertible note receivable

LIABILITIES AND STOCKHOLDERS’

4 unchanged sentences

Total liabilities

Commitments and contingencies

Stockholders’

4,725 shares issued and outstanding at September 30, 2020 and December 31, 2019;

Preferred stock, $.0001 par value, 50,000,000 Authorized

5,000,000 shares designated;

4,725 shares issued and outstanding at March 31, 2021 and December 31, 2020;

liquidation value of $0.0001 per share

834 shares issued and outstanding at September 30, 2020 and December 31, 2019;

5,000,000 shares designated;

834 shares issued and outstanding at March 31, 2021 and December 31, 2020;

liquidation value of $0.0001 per share

Common stock, $0.0001 par value, 100,000,000 shares authorized;

34,920,222 and 4,825,552 shares issued at September 30, 2020 and December 31, 2019, respectively;

34,920,219 and 4,825,549 shares outstanding at September 30, 2020 and December 31, 2019, respectively

89,531,149 and 34,920,222 shares issued at March 31, 2021 and December 31, 2020, respectively;

89,531,146 and 34,920,219 shares outstanding at March 31, 2021 and December 31, 2020, respectively

Additional paid-in-capital

Treasury stock, at cost, 3 shares at September 30, 2020 and December 31, 2019

Treasury stock, at cost, 3 shares at March 31, 2021 and December 31, 2020

Accumulated deficit

2 unchanged sentences

accompanying notes to condensed consolidated financial statements

SPHERIX INCORPORATED)

Consolidated Statements of Operations

in thousands except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended

Operating costs and expenses

5 unchanged sentences

Other income (expenses)

Gains and (losses) on marketable securities

Interest income

Losses on marketable securities

Change in fair value of investment

Change in fair value of warrant liabilities

Total other expenses

4 unchanged sentences

accompanying notes to condensed consolidated financial statements

AIKIDO PHARMA INC.

SPHERIX INCORPORATED)

Statements of Changes in Stockholders’

Consolidated Statements of Changes in Stockholders’

in thousands except share and per share amounts)

the Three Months Ended September 30, 2020

the Three Months Ended March 31, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

June 30, 2020

Distribution of Hoth common

at September 30, 2020

the Three Months Ended September 30, 2019

Stockholders’

at June 30, 2019

of common stock, net of offering cost / At-the-market offering

at September 30, 2019

accompanying notes to condensed consolidated financial statements

SPHERIX INCORPORATED)

Statements of Changes in Stockholders’

in thousands except share and per share amounts)

the Nine Months Ended September 30, 2020

Stockholders’

at December 31, 2019

of common stock, common warrants and prefunded warrants, net of offering cost

of common stock, net of offering cost

warrant and prefunded warrant exercise

of Hoth common stock

at September 30, 2020

the Nine Months Ended September 30, 2019

Balance at December 31, 2020

Issuance of common stock and warrants (net of offering costs of $8,260)

Exercise of warrants

Issuance of common stock for research and development license acquired

Stock-based compensation

Balance at March 31, 2021

the Three Months Ended March 31, 2020

Preferred Stock

Treasury Stock

Stockholders’

at December 31, 2018

of common stock and prefunded common stock warrants, net of offering cost

of common stock, net of offering cost / At-the-market offering

of prefunded common stock warrants

of common shares for prefunded warrants

shares adjusted for reverse split

at September 30, 2019

Balance at December 31, 2019

Issuance of common stock, common warrants and prefunded warrants (net of offering costs of $958)

Issuance of common stock (net of offering costs of $655)

Common warrant and prefunded warrant exercise

Balance at March 31, 2020

accompanying notes to condensed consolidated financial statements

SPHERIX INCORPORATED)

Consolidated Statements of Cash Flows

in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

1 unchanged sentence

Change in fair value of investment

Change in fair value of warrant liabilities

Research and development-acquired license, expensed

1 unchanged sentence

Realized (gain) loss on marketable securities

Unrealized loss (gain) on marketable securities

Unrealized loss on marketable securities

Changes in assets and liabilities:

2 unchanged sentences

Accrued salaries and benefits

Interest receivable on convertible note

Payable to DatChat

3 unchanged sentences

Sale of marketable securities

Sale of Hoth common shares

Purchase of investments at fair value

Purchase of research and development licenses

Net cash (used in) provided by investing activities

Purchase of convertible note

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issuance common stock, common warrants and prefunded warrants, net of offering cost

Proceeds from issuance common stock and warrants, net of offering cost

Proceeds from issuance common stock, net of offering cost

Proceeds from issuance common stock/ At-the-market offering

Offering costs from the issuance of common stock / At-the-market offering

Proceeds from exercise of warrants

4 unchanged sentences

Non-cash investing and financing activities

Distribution of Hoth common stock

Offering cost included in accrued expenses

accompanying notes to condensed consolidated financial statements

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

1 unchanged sentence

and Description of Business

Pharma Inc., formerly known as Spherix Incorporated (the “Company”), was initially formed in 1967 and is currently

a biotechnology company with a diverse portfolio of small-molecule anti-cancer therapeutics in development.

The Company’s

platform consists of patented technology from leading universities and researchers and we are currently in the process of developing

an innovative therapeutic drug platform through strong partnerships with world-renowned educational institutions, including the

University of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University.

The Company’s diverse pipeline

of therapeutics includes therapies for pancreatic cancer, acute myeloid leukemia (“AML”) and acute lymphoblastic leukemia

(“ALL”).

The Company is also developing a broad-spectrum antiviral platform that may potentially inhibit replication

of multiple viruses including Influenza virus, SARS-CoV (coronavirus), MERS-CoV, Ebolavirus and Marburg virus.

Company previously focused its efforts on owning, developing, acquiring and monetizing intellectual property assets.

2016, the Company has received limited funds from its intellectual property monetization.

In addition to its patent monetization

efforts, since the fourth quarter of 2017, the Company has been transitioning to focus its efforts as a technology and biotechnology

development company.

These efforts have focused on biotechnology research and blockchain technology research.

The Company’s

investment in biotechnology research development includes:

(i) an investment in Hoth Therapeutics, Inc.

(“Hoth”),

a development stage biopharmaceutical company focused on unique targeted therapeutics for patients suffering from indications

such as atopic dermatitis, also known as eczema, (ii) an investment in DatChat, Inc.

(“DatChat”), a privately held

personal privacy platform focused on encrypted communication, internet security and digital rights management, and (iii) the acquisition

of assets of CBM BioPharma, Inc.

(“CBM”), a pharmaceutical company focusing on the development of cancer treatments.

the nine months ended September 30, 2020, the Company raised over $2.0 million of proceeds (see Note 8), therefore, a payment

of $1.0 million was due to CBM pursuant to that certain Asset Purchase Agreement, dated as of May 15, 2019, by and between the

Company and CBM, as amended (the “CBM Purchase Agreement”).

The Company recorded this payment to CBM as a component

of research and development license acquired during the nine months ended September 30, 2020 in the condensed consolidated statements

of operations.

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

a result of the Company’s biotechnology research development and associated investments and acquisitions, the Company’s

business portfolio now focuses on the treatment of three different cancers, including pancreatic cancer, AML and ALL.

The Company’s

AML and ALL compounds, developed at Wake Forest University, are targeted therapeutics designed to overcome multiple resistance

mechanisms observed with the current standard of care.

DHA-dFdC, the Company’s pancreatic drug candidate developed at the

University of Texas at Austin (“UTA”), is a new compound that the Company hopes will become the next generation of

chemotherapy treatment for advanced pancreatic cancer.

DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs

and is well tolerated in preclinical toxicity tests.

Preclinical studies have also indicated that DHA-dFdC inhibits pancreatic

cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy), has documented efficacy against

pancreatic tumors in a clinically relevant transgenic mouse model and has demonstrated activities against other cancers, including

leukemia, lung and melanoma.

DHA-dFdC is being developed for oral administration in a solid lipid nanoparticle carrier matrix,

which has also been licensed from UTA, and is intended to be a second-line treatment for advanced pancreatic cancer.

Pharma Inc.(the “Company”

and “We”), formerly known as Spherix Incorporated, was initially formed in 1967.

2017, the Company has operated as a biotechnology company with a diverse portfolio of small-molecule anticancer and antiviral therapeutics

in development.

The Company’s pipeline consists of patented technology from leading universities and researchers.

The Company is

currently in the process of developing its innovative therapeutic drug pipeline through strong partnerships with world renowned educational

institutions, including the University of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University.

The Company’s

license with UTA (the “License”) is a royalty-bearing exclusive license that, unless terminated earlier, continues

until the last date of expiration or termination of the patent rights granted under the License (the “Patent Rights”).

With regard to DHA-dFdC, the Patent Rights include several filed U.S.

patent applications (a “U.S.

Patent Application”)

and an application filed under the Patent Cooperation Treaty (“PCT”) that is currently being prosecuted to secure

rights in foreign countries.

From these applications, one patent, U.S.

10,463,684 (the “684 Patent”), contains

items covering the compound DHA-dFdC.

Assuming all maintenance fees are timely paid, the 684 Patent is expected to expire on October

The Company’s license with UTA also covers a non-provisional U.S.

Patent Application filed with respect to the

lipid nanoparticle carrier matrix for the drug, which was filed on June 6, 2019.

In June of 2020, at the request of the Company,

UTA filed both a U.S.

non-provisional utility patent application as well as a PCT application relating to the lipid nanoparticle

carrier matrix.

Patent prosecution on all pending patent applications is currently underway.

The Company is currently engaged

in third party Chemistry, Manufacturing and Controls (“CMC”) activities related to DHA-dFdC.

Manufacturing activities

thus far have confirmed the critical chemical steps required for the manufacturing and scalability of the process.

the Company is developing the solid lipid nanoparticle delivery system and is currently optimizing the manufacturing process for

size and consistency of the particles.

The Company expects these activities, as well as the development of the final formulation

to comprise most of the CMC activities through the end of the year.

Optimization of the formulation will require in vitro studies

as well as some preliminary animal studies.

During the first half of 2021, optimization of the formulation and biological studies,

including animal toxicology testing and pharmacology testing, are scheduled to occur.

To the extent costs are incurred relating

to governmental regulations, including under the FDA and environmental regulations, those costs will be borne by our Contract

Manufacturing Organizations and Contract Research Organizations and will be passed on to the Company as part of their fees.

approval will eventually be required to begin administering DHA-dFdC to patients as part of any clinical trials.

The animal studies

performed next year will be a necessary prerequisite to filing an Investigational New Drug Application (“IND”) with

The Company’s development activities in the first half of 2021 will also include preparing the IND for submission

The Company’s formulation is a new chemotherapy oral dosage form “repurposing”

the chemotherapeutic

agent gemcitabine, enabling it to be developed for use in patients following a special regulatory pathway codified in Section

505(b)(2) of the FDA rules.

Section 505(b)(2) was enacted to enable sponsors to seek New Drug Application (“NDA”)

approval for novel repurposed drugs without the need for such sponsors to undertake certain time consuming and expensive safety

Proceeding under this regulatory pathway, we hope to be able to rely upon all of the publicly available safety and toxicology

data with respect to gemcitabine in our FDA submissions.

We believe that this path will dramatically reduce the required clinical

development efforts, costs and risks as compared to what would be required of us if we were required to conduct the entire scope

of trials required for new chemical entities that are not eligible to be reviewed pursuant to the Section 505(b)(2) regulatory

We estimate that by using the Section 505(b)(2) regulatory pathway, the clinical development process may be several years

shorter than is required for a new chemical entity, and the FDA approval process may be six to nine months shorter than the typical

eighteen month period, which we believe may result in lower development costs and shorter development time.

As of the date hereof,

we have not submitted an IND or an NDA to the FDA.

During the first half of 2021, we hope to schedule and attend the first of

a series of meetings with the FDA to review the requirements for submission and activation of an IND with respect to the DHA/dFdC

formulated in SLNs for second-line treatment of advanced pancreatic cancer.

At that meeting, we will present to the FDA our proposed

clinical trial plan for the treatment of advanced pancreatic cancer.

As part the meeting, as is standard, the FDA will provide

us with general guidance with respect to specific animal studies, dosing schedules and suggested human safety studies before we

commence clinical trials in patients.

In addition, the Company is constantly seeking to grow its pipeline to treat unmet medical

needs in oncology.

addition, the Company owns an exclusive world-wide license to patented technology from the University of Maryland, Baltimore (“UMB”).

The Company’s license is for a broad-spectrum antiviral drug platform.

The licensed technology is a broadly acting pan-viral

inhibitory compound with efficacy against multiple viral pathogens.

The technology works to inhibit replication of multiple viruses

including Influenza virus, SARS-CoV (coronavirus), MERS-CoV, Ebolavirus and Marburg virus.

The Company’s license covers

Nonprovisional Applications, which were consolidated and timely filed as a PCT application on June 5, 2020, commencing

patent prosecution.

Any patents issued from this application are expected to expire 20 years later, on June 5, 2040, unless the

term is extended by the patent office.

Publication of the results of the work to which the Company is licensed is expected later

Currently, the Company and UMB are collaborating to identify chemical structures that are as effective as, or more

effective than, the lead compounds covered in the PCT application.

The UMB inventors are Drs.

Matthew Frieman, Alexander MacKerell

and Stuart Watson.

The Company has also executed a Sponsored Research Agreement with UMB to support the development of the technology.

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

Nasdaq Stock Market Deficiency Notice

September 24, 2020, the Company received a staff deficiency notice from Nasdaq informing the Company that its common stock failed

to comply with the $1.00 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule

Nasdaq’s letter advised the Company that, based upon the closing bid price during the period from August 12,

2020 to September 23, 2020, the Company no longer met this test.

to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided with a compliance period of 180 calendar days, or until

March 23, 2021, to regain compliance with the minimum bid price requirement.

To regain compliance, the closing bid price of the

Company’s common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to March

oncology therapeutics include prospective treatments for pancreatic cancer, acute myeloid leukemia (AML) and acute lymphoblastic leukemia

The Company is also developing a broad-spectrum antiviral platform, in which the lead compounds have activity in cell-based assays

against multiple viruses including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the cause of COVID-19.

As a result of the Company’s biotechnology research

and development and associated investments and acquisitions, its business portfolio now focuses on the treatment of three different cancers

and multiple types of viral infections.

The Company’s pancreatic drug candidate, DHA-dFdC, developed at and licensed from the University

of Texas at Austin, is a new compound that it hopes will become the next generation of chemotherapy treatment for advanced pancreatic

DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical toxicity tests.

Preclinical studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine,

a current standard therapy), targets pancreatic tumors and has demonstrated activities against other cancers.

The Company has also executed

a Sponsored Research Agreement with UMB to support the development of the technology under the direction of these inventors at UMB.

Liquidity and Capital Resources

Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding

(non-financing related) revenue.

While the Company continues to implement its business strategy, it intends to finance its activities

current cash, cash equivalents and marketable securities on hand from the Company’s past debt and equity offerings,

additional funds raised through the sale of additional securities in the future,

additional liquidity through credit facilities or other debt arrangements, and

revenue from its patent portfolios, license fees and new business ventures.

Company has funded its operations from proceeds from the sale of equity and debt securities, including pre-funded warrants.

Company will require significant additional capital to make the investments it needs to execute its longer-term business plan.

The Company’s ability to successfully raise sufficient funds through the sale of debt or equity securities when needed is

subject to many risks and uncertainties and, even if it were successful, future equity issuances would result in dilution to its

existing stockholders and future debt securities may contain covenants that limit the Company’s operations or ability to

enter into certain transactions.

Company’s current cash is sufficient to fund operations for at least the next 12 months;

however, the Company will need

to raise additional funding through strategic relationships, public or private equity or debt financings, grants or other arrangements

to develop and seek regulatory approvals for the Company’s existing and new product candidates.

If such funding is not available,

or not available on terms acceptable to the Company, the Company’s current development plan and plans for expansion of its

general and administrative infrastructure may be curtailed.

is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible

that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search

for drug candidates, the specific impact is not readily determinable as of the date of these financial statements.

The financial

Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing

related) revenue.

While the Company continues to implement its business strategy, it intends to finance its activities through managing

current cash on hand from the Company’s past debt and equity offerings.

the first quarter of 2021, the Company consummated a public offering of 53,905,927 shares of common stock (including the underwriter

overallotment).

The Company received net proceeds of approximately $78.0 million after deducting underwriting discounts and commissions

and estimated offering expenses payable by the Company.

Based upon projected cash flow requirements, the Company has adequate cash to

fund its operations for at least the next twelve months from the date of the issuance of these consolidated financial statements.

is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that

the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for drug candidates,

the specific impact is not readily determinable as of the date of these consolidated financial statements.

The consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies

of Presentation and Principles of Consolidation

accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries.

All material intercompany balances and transactions have been eliminated.

Certain immaterial reclassifications have been made

to prior period amounts to conform to the current period presentation.

accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries,

Nuta Technology Corp.

(“Nuta”), Spherix Portfolio Acquisition II, Inc.

(“SPAII”), Guidance IP, LLC (“Guidance”),

Directional IP, LLC (“Directional”), Spherix Management Services, LLC (“SMS”), Spherix Delaware Merger Sub Inc.

(“Merger Sub”), Spherix Merger Subsidiary, Inc (“SMSI”) and NNPT, LLC (“NNPT”).

All significant intercompany

balances and transactions have been eliminated in consolidation.

to Condensed Consolidated Financial Statements

accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting

principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and

pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”)

and on the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated

balance sheet as of September 30, 2020, condensed consolidated statements of operations for the three and nine months ended September

30, 2020 and 2019, condensed consolidated statement of stockholders’

equity for the three and nine months ended September

30, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019

are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary

for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The results for

the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the year ending

December 31, 2020 or for any future interim period.

The condensed consolidated balance sheet at December 31, 2019 has been derived

from audited financial statements;

however, it does not include all of the information and notes required by U.S.

GAAP for complete

financial statements.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with

the consolidated financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s annual

report on Form 10-K, which was filed with the SEC on February 3, 2020.

GAAP”) for interim financial information and pursuant

to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on

the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet

as of March 31, 2021, condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, condensed consolidated

statement of stockholders’

equity for the three months ended March 31, 2021 and 2020, and the condensed consolidated statements

of cash flows for the three months ended March 31, 2021 and 2020 are unaudited, but include all adjustments, consisting only of normal

recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and

cash flows for the periods presented.

The results for the three months ended March 31, 2021 are not necessarily indicative of results

to be expected for the year ending December 31, 2021 or for any future interim period.

The condensed consolidated balance sheet at December

31, 2020 has been derived from audited financial statements;

however, it does not include all of the information and notes required by

GAAP for complete financial statements.

The accompanying unaudited condensed consolidated financial statements should be read in

conjunction with the consolidated financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s

annual report on Form 10-K, which was filed with the SEC on March 25, 2021.

accompanying condensed consolidated financial statements have been prepared in conformity with US GAAP.

This requires management

to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent

assets and liabilities at the date of the financial statements, and the reported expenses during the period.

This requires management to make

estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities

at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period.

The Company’s

significant estimates and assumptions include the valuation of investments and the valuation allowance related to the Company’s

deferred tax assets.

Certain of the Company’s estimates, including the carrying amount of its investments, could be affected

by external conditions, including those unique to the Company and general economic conditions.

It is reasonably possible that

these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those

estimates and assumptions.

significant estimates and assumptions include stock-based compensation, the valuation of investments and the valuation allowance related

to the Company’s deferred tax assets.

Certain of the Company’s estimates could be affected by external conditions, including

those unique to the Company and general economic conditions.

It is reasonably possible that these external factors could have an effect

on the Company’s estimates and could cause actual results to differ from those estimates and assumptions.

Accounting Policies

than as described below, there have been no material changes in the Company’s significant accounting policies to those previously

disclosed in the Company’s annual report on Form 10-K, which was filed with the SEC on February 3, 2020.

Income Loss per Share

loss per share is computed by dividing the net income or loss applicable to common shares by the weighted average number of common

shares outstanding during the period.

Net loss attributable to common stockholders includes the effect of the deemed capital contribution

on extinguishment of preferred stock and the deemed dividend related to the immediate accretion of beneficial conversion feature

of convertible preferred stock.

Diluted earnings per share is computed using the weighted average number of common shares and,

if dilutive, potential common shares outstanding during the period.

Potential common shares consist of the incremental common

shares issuable upon the exercise of stock options (using the treasury stock method) and the conversion of the Company’s

convertible preferred stock and warrants (using the if-converted method).

Diluted loss per share excludes the shares issuable

upon the conversion of preferred stock and the exercise of stock options and warrants from the calculation of net loss per share

if their effect would be anti-dilutive.

disclosed in the Company’s annual report on Form 10-K, which was filed with the SEC on March 25, 2021.

Value Option - Convertible Note

guidance in ASC 825, Financial Instruments , provides a fair value option election that allows entities to make

an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities.

Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings.

to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument

and is irrevocable once elected.

Assets and liabilities measured at fair value pursuant to this guidance are required to be reported

separately in our condensed consolidated balance sheets from those instruments using another accounting method.

Adopted Accounting Standards

August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, “

Fair Value Measurement

(Topic 820), - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,”

a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy

associated with Level 1, Level 2 and Level 3 fair value measurements.

This guidance is effective for fiscal years, and interim

periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted upon issuance of the update.

The Company adopted this ASU on January 1, 2020 and the adoption of this ASU did not have a material impact on its consolidated

financial statements or related disclosures.

SPHERIX INCORPORATED)

December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2019-12, “

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to

accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends

existing guidance to improve consistent application.

This guidance is effective for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2020, with early adoption permitted.

The Company adopted ASU No.

2019-12 effective January 1, 2021,

and the adoption did not have a material impact on its consolidated financial statements.

to Condensed Consolidated Financial Statements

License agreement with Silo Pharma Inc.

January 5, 2021, the Company entered into an exclusive patent license agreement (the “License Agreement”) with Silo Pharma

Inc., a Delaware corporation and Silo Pharma Inc., a Florida corporation, and their affiliates/subsidiaries (collectively, “Silo

Pharma”).

On April 12, 2021, the Company entered into an amendment to the License Agreement (“Amendment”).

The Amendment

amended a portion of the license fees included in the original License Agreement and converted 500 shares of the Company’s Series

M Convertible Preferred Stock into an aggregate of 625,000 restricted shares of the Company’s common stock, par value $0.001 per

share, effective as of January 5, 2021.

consideration for the license of the Licensed Patents, the Company issued and delivered to Silo Pharma 625,000 shares of the Company’s

restricted stock.

The Company paid a one-time nonrefundable cash payment of $0.5 million to Silo Pharma.

The Company shall also pay Silo

Pharma a running royalty equal 2% of “net sales”

(as such term is defined in the License Agreement).

Investments in Marketable Securities

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three and nine months

ended September 30, 2020 and 2019, which are recorded as a component of gains and (losses) on marketable securities on the consolidated

statements of operations (excluding a $70,000 distribution to CBM shareholders during the nine months ended September 30, 2020),

are as follows ($ in thousands):

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three months ended March

31, 2021 and 2020, which are recorded as a component of gains and (losses) on marketable securities on the consolidated statements of

operations, are as follows ($ in thousands):

For the Three Months

Ended March 31,

Realized gain (loss)

Unrealized gain (loss)

Unrealized loss

Dividend income

1 unchanged sentence

Investment in Hoth Therapeutics, Inc.

following summarizes the Company investment in Hoth as of September 30, 2020:

following summarizes the Company investment in Hoth as of March 31, 2021:

Security Name

Shares Owned as of September 30,

Fair value per Share as of September 30,

Fair value as of September 30,

Shares Owned as of

Fair value per Share as of

Fair value as of March 31,

(in thousands)

May 6, 2020, the Company entered into that certain Stock Transfer Agreement, by and between the Company and a purchaser, and sold

400,000 shares of Hoth common stock for net proceeds of approximately $0.5 million.

February 23, 2020, the Board of Directors approved a distribution to the Company’s stockholders of up to 70,000 Hoth Shares

held by the Company.

Accordingly, each of the Company’s stockholders received one (1) share of Hoth common stock for every

five hundred (500) shares of Company common stock held as of 5 p.m.

Eastern Time on April 30, 2020, the dividend record date.

The Company did not distribute fractional shares of Hoth common stock, and any fractional shares were rounded down to the nearest

The final distribution amount of Hoth Shares is 69,815.

Fair Value of Financial Assets and Liabilities

instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management

believes approximates fair value due to the short-term nature of these instruments.

The Company measures the fair value of financial

assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit

price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants

on the measurement date.

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when

measuring fair value.

instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes

approximates fair value due to the short-term nature of these instruments.

The Company measures the fair value of financial assets and

liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

Company uses three levels of inputs that may be used to measure fair value:

2 unchanged sentences

3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

following table presents the Company’s assets and liabilities that are measured at fair value at September 30, 2020 and

December 31, 2019 ($ in thousands):

Fair value measured at September 30, 2020

Total at September 30,

following table presents the Company’s assets and liabilities that are measured at fair value at March 31, 2021 and December 31,

2020 ($ in thousands):

Fair value measured at March 31, 2021

Total at March 31,

Quoted prices in active markets

1 unchanged sentence

Significant unobservable inputs

Marketable securities - mutual and exchange traded funds

Investments in Hoth

Marketable securities

Short-term investment

Convertible note receivable

Fair value measured at December 31, 2020

3 unchanged sentences

Significant unobservable inputs

Marketable securities - mutual and exchange traded funds

Investments in Hoth

Marketable securities

3 Valuation Techniques

following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured

at fair value on a recurring basis:

Fair Value of Level 3 investment

Beginning balance

Purchase of convertible note

Accrued interest receivable

Ending balance

January 29, 2021, the Company purchased an 8% convertible promissory note (“Convertible Note”) issued by Convergent Therapeutics,

(“Convergent”) with a principal amount of $2 million pursuant to a Note Purchase Agreement with Convergent.

paid a purchase price for the Convertible Note of $2 million.

The Company will receive interest on the Convertible Note at the rate of

8% per annum payable upon conversion or maturity of the Convertible Note.

The Convertible Note shall mature on January 29, 2023.

Company has elected to measure the purchase of the Convertible Note from Convergent using the fair value option at each reporting

Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses

on the host contract and derivative due to change in the fair value will be reflected in interest income and other, net in the condensed

consolidated statements of operations.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

The Convertible Note is disclosed as

a noncurrent Convertible Note investment in the condensed consolidated balance sheets.

As of March 31, 2021, the fair value of the Convertible

Note was measured at $2.0 million, taking into consideration cost of the investment, market participant inputs, market conditions,

liquidity, operating results and other qualitative and quantitative factors.

The value at which the Company’s Convertible Note is

carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market

conditions and those characteristics specific to the underlying investments.

No change in fair value was recorded during the three months

ended March 31, 2021.

Interest accrues on the unpaid principal balance

on a quarterly basis and is recognized in interest income in the condensed consolidated statements of operations.

The Company recorded

an interest income receivable of approximately $27,000 on the Convertible Note as of March 31, 2021.

Net Loss per Share

that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share

at September 30, 2020 and 2019 are as follows:

As of September 30,

Securities that could potentially dilute loss

per share in the future that were not included in the computation of diluted loss per share at March 31, 2021 and 2020 are as follows:

As of March 31,

Convertible preferred stock

2 unchanged sentences

Stockholders’

Equity and Convertible Preferred Stock

March 23, 2020, the Company declared a dividend of one right (“Right”) for each of the Company’s issued and

outstanding shares of common stock.

Each Right entitles a holder of record, as of the close of business on March 30, 2020, to

purchase from the Company one one-thousandth of a share of the Company’s Series L preferred stock at a price of $5.00, subject

to certain adjustments and subject to the terms of that certain Rights Agreement, dated as of March 23, 2020, by and between the

Company and VStock Transfer, LLC, as rights agent (the “Rights Agreement”).

The purpose of the Rights Agreement is

to diminish the risk that the Company’s ability to use its net operating losses and certain other tax assets (collectively,

Tax Benefits ”) to reduce potential future federal income tax obligations would become subject to limitations

by reason of the Company experiencing an “ownership change,”

as defined in Section 382 of the Internal Revenue Code

of 1986, as amended (the “

Tax Code ”).

A company generally experiences such an ownership change if the percentage

of its stock owned by its “5-percent shareholders,”

as defined in Section 382 of the Tax Code, increases by more than

50 percentage points over a rolling three-year period.

The Rights Agreement is designed to reduce the likelihood that the Company

will experience an ownership change under Section 382 of the Tax Code by (i) discouraging any person or group from becoming a

shareholder of 4.99% or more of Common Stock and (ii) discouraging any existing 4.99% shareholder from acquiring any additional

shares of the Company’s stock.

On March 24, 2020, the Company filed a Certificate of Designation of Series L Preferred Stock

with the Secretary of State of the State of Delaware to designate a new Series L preferred stock of the Company.

As of September

30, 2020, no Rights have been exercised.

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

March 3, 2020, the Company entered into that certain Securities Purchase Agreement, by and among the Company and certain purchasers,

pursuant to which the Company agreed to issue and sell to the purchasers 3,245,745 shares of the Company’s common stock,

and common warrants (“Common Warrants”) to purchase up to 7,142,858 shares of common stock at

a price of $ 1.05 per share of common stock and Common Warrant.

also offered 3,897,113 pre-funded warrants (“Pre-Funded Warrants”) to purchase shares of common stock with a purchase

price of $1.0499 each Pre-Funded Warrant.

The exercise price of each Pre-Funded Warrant was $0.0001 per share and each Common

Warrant was $1.05 per share.

offering resulted in gross proceeds of approximately $7.5 million before deducting the placement agent’s fee and related

offering expenses of $1.0 million.

March 9, 2020, the Company entered into that certain Securities Purchase Agreement, by and among the Company and certain purchasers,

pursuant to which the Company agreed to issue and sell, in a registered direct offering, 2,090,909 shares of the Company’s

common stock at an offering price of $ 2.75 per

Company also issued placement agent warrants to the placement agent (the “Placement Agent Warrant”) to purchase 167,273

shares of common stock with an exercise price of $3.4375 per share.

Company has determined that the Placement Agent Warrant should be accounted as a component of stockholders’

issuance date, the Company estimated the aggregate fair value of Placement Agent Warrant at $0.2 million using the Black-Scholes

option pricing model using the following primary assumptions:

fair value of common stock underlying the warrants is $1.83, expected

life of 5 years, volatility rate of 122.29%, risk-free interest rate of 0.63% and expected dividend rate of 0%.

April 14, 2020, the Company, entered into that certain Securities Purchase Agreement, by and among the Company and certain purchasers,

pursuant to which the Company agreed to issue and sell 14,000,000 shares of the Company’s common stock at

an offering price of $ 1.00 per share.

registered offering resulted in gross proceeds to the Company of $14.0 million, before deducting the placement agent’s fee

and other related offering expenses.

SPHERIX INCORPORATED)

to Condensed Consolidated Financial Statements

summary of warrant activity for the nine months ended September 30, 2020 is presented below:

Equity and Convertible

Preferred Stock

Public Offering

On February 19, 2021, the Company consummated

the public offering pursuant to an amended and restated underwriting agreement (the “Underwriting Agreement”) with H.C.

& Co., LLC, as representative to the underwriters named therein (the “Underwriter”), pursuant to which the Company agreed

to issue and sell to the Underwriter in an underwritten public offering (the “Offering”) an aggregate of 46,875,000 shares

(the “Shares”) of common stock, $0.0001 par value per share, of the Company (the “Common Stock”).

received gross proceeds of approximately $75 million before deducting underwriting discounts and commissions and estimated offering expenses

payable by the Company.

On February 23, 2021, the Underwriter partially exercised its over-allotment option and purchased an additional

7,030,927 Shares, resulting in aggregate proceeds of approximately $86.2 million, before deducting underwriting discounts and commissions

and other expenses.

The total net proceeds received from these two offerings were approximately $78.0 million.

In connection with the Offering, the Company issued

the Underwriter warrants (the “Underwriter’s Warrants”) to purchase up to 4,312,473 shares of Common Stock, or 8% of

the Shares sold in the Offering.

The Underwriter’s Warrants will be exercisable for a period of five years from February 19, 2021

at an exercise price of $2.00 per share, subject to adjustment.

A summary of warrant activity for the three months

ended March 31, 2021 is presented below:

Weighted Average Exercise Price

2 unchanged sentences

Outstanding as of December 31, 2020

(10,758,016 )

Outstanding as of September 30, 2020

the nine months ended September 30, 2020, the Company issued 3,897,113 and 6,860,903 shares of common stock upon exercise of the

Pre-Funded Warrant and Common Warrants, respectively, which resulted in gross proceeds of approximately $7.2 million.

Outstanding as of March 31, 2021

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Stock Options

A summary of stock option activity for the three

months ended March 31, 2021 is presented below:

Number of Shares

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life (in years)

Outstanding as of December 31, 2020

Employee options granted

Outstanding as of March 31, 2021

Options vested and exercisable

Stock-based compensation associated with the amortization

of stock option expense was approximately $0.1 million and $0 for the three months ended March 31, 2021 and 2020, respectively.

compensation was recorded as a component of general and administrative expenses.

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $70,000 and will be recorded through July 2021.

Restricted Stock Awards

Pursuant to the patent license agreement effective

January 5, 2021 with Silo Parma Inc., the Company issued and delivered to Silo Pharma 625,000 shares of the Company’s restricted

stock as consideration for the license of the licensed patents.

This restricted stock award vested immediately.

The Company recorded approximately

$0.5 million in research and development expense related with license acquired during the three months ended March 31, 2021 related to

this arrangement.

Commitments and Contingencies

the past, in the ordinary course of business, the Company actively pursued legal remedies to enforce its intellectual property

rights and to stop unauthorized use of our technology.

Other than ordinary routine litigation incidental to the business, we know

of no material, active or pending legal proceedings against us.

and Uncertainties –

is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible

that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search

for drug candidates, the specific impact is not readily determinable as of the date of these financial statements.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

Legal Proceedings

In the past, in the ordinary course of business,

the Company actively pursued legal remedies to enforce its intellectual property rights and to stop unauthorized use of our technology.

Other than ordinary routine litigation incidental to the business, we know of no material, active or pending legal proceedings against

Risks and Uncertainties –

Management continues to evaluate the impact of

the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s financial position, results of its operations and/or search for drug candidates, the specific impact is not readily

determinable as of the date of these consolidated financial statements.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Subsequent Events

Company evaluated events that have occurred after the balance sheet date through the date the financial statements were issued.

Based upon the evaluation and transactions, the Company did not identify any other subsequent events that would have required

adjustment or disclosure in the financial statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking

should read this discussion together with the Financial Statements, related Notes and other financial information included elsewhere

in this Form 10-Q.

The following discussion contains assumptions, estimates and other forward-looking statements that involve

a number of risks and uncertainties.

These risks could cause our actual results to differ materially from those anticipated in

these forward-looking statements.

The Company evaluated events that have occurred

after the balance sheet date through the date the financial statements were issued.

Based upon the evaluation and transactions, the Company

did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking Statements

You should read this discussion together with

the Financial Statements, related Notes and other financial information included elsewhere in this Form 10-Q.

The following discussion

contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties.

These risks could

cause our actual results to differ materially from those anticipated in these forward-looking statements.

All references to “we,”

2 unchanged sentences

and the “Company”

refer to Aikido Pharma Inc.

(formerly Spherix Incorporated), a Delaware corporation and its consolidated subsidiaries unless the

context requires otherwise.

Pharma Inc., formerly known as Spherix Incorporated (the “Company”), was initially formed in 1967 and is currently

a biotechnology company with a diverse portfolio of small-molecule anti-cancer therapeutics in development.

The Company’s

platform consists of patented technology from leading universities and researchers and we are currently in the process of developing

an innovative therapeutic drug platform through strong partnerships with world-renowned educational institutions, including the

University of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University.

Our diverse pipeline of therapeutics

includes therapies for pancreatic cancer, acute myeloid leukemia (“AML”) and acute lymphoblastic leukemia (“ALL”).

The Company is also developing a broad-spectrum antiviral platform that may potentially inhibit replication of multiple viruses

including Influenza virus, SARS-CoV (coronavirus), MERS-CoV, Ebolavirus and Marburg virus.

Company previously focused its efforts on owning, developing, acquiring and monetizing intellectual property assets.

2016, the Company has received limited funds from its intellectual property monetization.

In addition to its patent monetization

efforts, since the fourth quarter of 2017, the Company has been transitioning to focus its efforts as a technology and biotechnology

development company.

These efforts have focused on biotechnology research and blockchain technology research.

The Company’s

investment in biotechnology research development includes:

(i) an investment in Hoth Therapeutics, Inc.

(“Hoth”),

a development stage biopharmaceutical company focused on unique targeted therapeutics for patients suffering from indications

such as atopic dermatitis, also known as eczema, (ii) an investment in DatChat, Inc.

(“DatChat”), a privately held

personal privacy platform focused on encrypted communication, internet security and digital rights management, and (iii) the acquisition

of assets of CBM BioPharma, Inc.

(“CBM”), a pharmaceutical company focusing on the development of cancer treatments.

a result of the Company’s biotechnology research development and associated investments and acquisitions, our business portfolio

now focuses on the treatment of three different cancers, including pancreatic cancer, AML and ALL.

Our AML and ALL compounds,

developed at Wake Forest University, are targeted therapeutics designed to overcome multiple resistance mechanisms observed with

the current standard of care.

DHA-dFdC, our pancreatic drug candidate developed at the University of Texas at Austin (“UTA”),

is a new compound that we hope will become the next generation of chemotherapy treatment for advanced pancreatic cancer.

overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical toxicity tests.

studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine,

a current standard therapy), has documented efficacy against pancreatic tumors in a clinically relevant transgenic mouse model

and has demonstrated activities against other cancers, including leukemia, lung and melanoma.

DHA-dFdC is being developed for

oral administration in a solid lipid nanoparticle carrier matrix, which has also been licensed from UTA, and is intended to be

a second-line treatment for advanced pancreatic cancer.

The Company’s license with UTA (the “License”) is a

royalty-bearing exclusive license that, unless terminated earlier, continues until the last date of expiration or termination

of the patent rights granted under the License (the “Patent Rights”).

With regard to DHA-dFdC, the Patent Rights include

several filed U.S.

patent applications (a “U.S.

Patent Application”) and an application filed under the Patent Cooperation

Treaty (“PCT”) that is currently being prosecuted to secure rights in foreign countries.

From these applications,

one patent, U.S.

10,463,684 (the “684 Patent”), contains items covering the compound DHA-dFdC.

all maintenance fees are timely paid, the 684 Patent is expected to expire on October 27, 2035.

The Company’s license with

UTA also covers a non-provisional U.S.

Patent Application filed with respect to the lipid nanoparticle carrier matrix for the

drug, which was filed on June 6, 2019.

In June of 2020, at the request of the Company, UTA filed both a U.S.

non-provisional utility

patent application as well as a PCT application relating to the lipid nanoparticle carrier matrix.

Patent prosecution on all pending

patent applications is currently underway.

The Company is currently engaged in Chemistry, Manufacturing and Controls (“CMC”)

activities related to DHA-dFdC.

Manufacturing activities thus far have confirmed the critical chemical steps required for the

manufacturing and scalability of the process.

In tandem, the Company is developing the solid lipid nanoparticle delivery system

and is currently optimizing the manufacturing process for size and consistency of the particles.

The Company expects these activities,

as well as the development of the final formulation to comprise most of the CMC activities through the end of the year.

of the formulation will require in vitro studies as well as some preliminary animal studies.

During the first half of 2021, optimization

of the formulation and biological studies, including animal toxicology testing and pharmacology testing, are scheduled to occur.

To the extent costs are incurred relating to governmental regulations, including under the FDA and environmental regulations,

those costs will be borne by our Contract Manufacturing Organizations and Contract Research Organizations and will be passed on

to the Company as part of their fees.

FDA approval will eventually be required to begin administering DHA-dFdC to patients as

part of any clinical trials.

The animal studies performed next year will be a necessary prerequisite to filing an Investigational

New Drug Application (“IND”) with the FDA.

The Company’s development activities in the first half of 2021 will

also include preparing the IND for submission to the FDA.

The Company’s formulation is a new chemotherapy oral dosage form

“repurposing”

the chemotherapeutic agent gemcitabine, enabling it to be developed for use in patients following a

special regulatory pathway codified in Section 505(b)(2) of the FDA rules.

Section 505(b)(2) was enacted to enable sponsors to

seek New Drug Application (“NDA”) approval for novel repurposed drugs without the need for such sponsors to undertake

certain time consuming and expensive safety studies.

Proceeding under this regulatory pathway, we hope to be able to rely upon

all of the publicly available safety and toxicology data with respect to gemcitabine in our FDA submissions.

We believe that this

path will dramatically reduce the required clinical development efforts, costs and risks as compared to what would be required

of us if we were required to conduct the entire scope of trials required for new chemical entities that are not eligible to be

reviewed pursuant to the Section 505(b)(2) regulatory pathway.

We estimate that by using the Section 505(b)(2) regulatory pathway,

the clinical development process may be several years shorter than is required for a new chemical entity, and the FDA approval

process may be six to nine months shorter than the typical eighteen month period, which we believe may result in lower development

costs and shorter development time.

As of the date hereof, we have not submitted an IND or an NDA to the FDA.

During the first

half of 2021, we hope to schedule and attend the first of a series of meetings with the FDA to review the requirements for submission

and activation of an IND with respect to the DHA/dFdC formulated in SLNs for second-line treatment of advanced pancreatic cancer.

At that meeting, we will present to the FDA our proposed clinical trial plan for the treatment of advanced pancreatic cancer.

As part the meeting, as is standard, the FDA will provide us with general guidance with respect to specific animal studies, dosing

schedules and suggested human safety studies before we commence clinical trials in patients.

In addition, we are constantly seeking

to grow our pipeline to treat unmet medical needs in oncology.

addition, the Company owns an exclusive world-wide license to patented technology from the University of Maryland Baltimore (“UMB”).

Our license is for a broad-spectrum antiviral drug platform.

The licensed technology is a broadly acting pan-viral inhibitory

compound with efficacy against multiple viral pathogens.

The technology works to inhibit replication of multiple viruses including

Influenza virus, SARS-CoV (coronavirus), MERS-CoV, Ebolavirus and Marburg virus.

The technology is covered by two patent applications

already on file with the United States Patent and Trademark Office.

The Company’s license covers two U.S.

Nonprovisional

Applications, which were consolidated and timely filed as a PCT application on June 5, 2020, commencing patent prosecution.

patents issued from this application are expected to expire 20 years later, on June 5, 2040, unless the term is extended by the

patent office.

Publication of the results of the work to which the Company is licensed is expected later this year.

the Company and UMB are collaborating to identify chemical structures that are as effective as, or more effective than, the lead

compounds covered in the PCT application.

The UMB inventors are Drs.

Matthew Frieman, Alexander MacKerell and Stuart Watson.

Company has also executed a Sponsored Research Agreement with UMB to support the development of the technology.

Accounting Policies

critical accounting policies are disclosed in our annual report on Form 10K for the year ended December 31, 2019 and there have

been no material changes to such policy or estimates during the nine months ended September 30, 2020.

Issued Accounting Pronouncements

Note 3 to the condensed consolidated financial statements for a discussion of recent accounting standards.

of Operations

months ended September 30, 2020 compared to three months ended September 30, 2019

the three months ended September 30, 2020, we incurred a loss from operations of approximately $1.0 million, as compared to $0.9

million during the comparable prior year period.

The increase in loss was primarily attributed to $0.2 million increase in research

and development expense, and partially offset by $0.2 million decrease in general and administrative expenses.

the three months ended September 30, 2020, other expense was approximately $1.1 million as compared to approximately $2.5 million

during the comparable prior year period.

The decrease in other expense was primarily attributed to a $1.8 million lower loss in

the change in fair value of investment in Hoth, and partially offset by $0.4 million increase in losses on marketable securities.

months ended September 30, 2020 compared to nine months ended September 30, 2019

the nine months ended September 30, 2020, we incurred a loss from operations of approximately $5.2 million as compared to $2.5

million during the comparable prior year period.

The increase in loss was primarily attributed to $1.1 million increase in research

and development expense incurred in connection with the license acquired, $0.9 million increase in other research and development

expense, and $0.6 million increase in general and administrative expenses.

During the nine months ended September 30, 2020, we

raised over $2.0 million of proceeds, therefore a payment of $1.0 million was due to CBM pursuant to that certain Asset Purchase

Agreement, dated as of May 15, 2019, by and between the Company and CBM, as amended (the “CBM Purchase Agreement”).

We recorded the payment to CBM as a component of research and development license acquired.

the nine months ended September 30, 2020, other expense was approximately $7.5 million as compared to approximately $2.7 million

during the comparable prior year period.

The increase in other expense was primarily attributed to a $4.6 million decrease in

change in fair value of investment in Hoth, and $0.2 million increase in losses on marketable securities.

and Capital Resources

continue to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing

related) revenue.

We do not expect to incur revenue until any of our biotechnology products are fully developed.

While we continue

to implement our business strategy, we intend to finance our activities through:

current cash, cash equivalents and marketable securities on hand from our past debt and equity offerings,

additional funds raised through the sale of additional securities in the future,

additional liquidity through credit facilities or other debt arrangements, and

revenue from its patent portfolios, license fees and new business ventures.

have funded our operations from proceeds from the sale of equity and debt securities, including pre-funded warrants.

We will require

significant additional capital to make the investments we need to execute our longer-term business plan.

Our ability to successfully

raise sufficient funds through the sale of debt or equity securities when needed is subject to many risks and uncertainties and,

even if we were successful, future equity issuances would result in dilution to our existing stockholders and future debt securities

may contain covenants that limit our operations or ability to enter into certain transactions.

current cash is sufficient to fund operations for at least the next 12 months;

however, we may need to raise additional funding

through strategic relationships, public or private equity or debt financings, grants or other arrangements to develop and seek

regulatory approvals for our existing and new product candidates.

If such funding is not available, or not available on terms

acceptable to us, our current development plan and plans for expansion of our general and administrative infrastructure may be

addition to the foregoing, based on our current assessment, we do not expect any material impact on our long-term development

timeline and our liquidity due to the worldwide spread of the COVID-19 virus.

However, we are continuing to assess the effect

on our operations by monitoring the spread of COVID-19 and the actions implemented to combat the virus throughout the world.

Flows from Operating Activities - For the nine months ended September 30, 2020 and 2019, net cash used in operations was approximately

$3.6 million and $2.2 million, respectively.

The cash used in operating activities for the nine months ended September 30, 2020

primarily resulted from a net loss of $12.7 million, and partially offset by reduction in fair value of investment of $7.4 million

and $1.2 million research and development expense related with license acquired.

The cash used in operating activities for the

nine months ended September 30, 2019 primarily resulted from a net loss of $5.2 million, $0.1 million unrealized loss on marketable

securities and $84,000 changes in assets and liabilities, and partially offset by $2.8 million change in fair value of our investment.

Flows from Investing Activities - For the nine months ended September 30, 2020 and 2019, net cash (used in) provided by investing

activities was approximately $(27.2) million and $1.2 million, respectively.

The cash used in investing activities for the nine

months ended September 30, 2020 primarily resulted from our purchase of marketable securities of $98.5 million and research and

development expense related with license acquired of $1.2 million, partially offset by our sale of marketable securities of $72.0

million since we invest excess cash into marketable securities until additional cash is needed.

The cash provided by investing

activities primarily resulted from our sale of marketable securities for the nine months ended September 30, 2019 of $8.4 million,

partially offset by our purchase of marketable securities of $6.7 million.

Flows from Financing Activities - Cash provided by financing activities for the nine months ended September 30, 2020 was $31.6

million, which reflects the net proceeds of $6.6 million from investors in exchange of issuance of common stock, common warrants

and prefunded warrants, net proceeds of $17.8 million from investors in exchange of issuance of common stock, and net proceeds

of $7.2 million from the exercise of common warrants and prefunded warrants.

Cash provided by financing activities for the nine

months ended September 30, 2019 was $1.3 million, which reflects the net proceeds of $0.8 million from investors in exchange of

issuance of common stock and prefunded common stock warrants, and net proceeds of $0.5 million from the issuance of common stock

as part of our ATM offering.

sheet arrangements.

refer to Aikido Pharma Inc., a Delaware corporation and its consolidated

subsidiaries unless the context requires otherwise.

AIkido Pharma Inc.

was initially formed in 1967.

Since 2017, the Company has operated as a biotechnology company with a diverse portfolio of small-molecule anticancer and antiviral therapeutics

in development.

The Company’s pipeline consists of patented technology from leading universities and researchers.

We are currently

in the process of developing our innovative therapeutic drug pipeline through strong partnerships with world renowned educational institutions,

including the University of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University.

Our oncology therapeutics

include treatments for pancreatic cancer, acute myeloid leukemia (AML) and acute lymphoblastic leukemia (ALL).

The Company is also developing

a broad-spectrum antiviral platform, in which the lead compounds have activity against multiple viruses including Influenza virus, Ebolavirus

and Marburg virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the cause of COVID-19.

As a result of the Company’s biotechnology

research and development and associated investments and acquisitions, our business portfolio now focuses on the treatment of three different

cancers and multiple types of viral infections.

Our pancreatic drug candidate, DHA-dFdC, developed at and licensed from the University

of Texas at Austin, is a new compound that we hope will become the next generation of chemotherapy treatment for advanced pancreatic cancer.

DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical toxicity tests.

studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current

standard therapy), targets pancreatic tumors and has demonstrated activities against other cancers, including leukemia, lung and melanoma.

Our AML and ALL compound, developed at the Wake Forest University, is a targeted therapeutic designed to overcome multiple resistance

mechanisms observed with the current standard of care.

Our broad-spectrum antiviral platform was developed

at the University of Maryland Baltimore (“UMB”), which granted the Company an exclusive worldwide Master License Agreement

(MLA”) to technology covered by three separate patent applications.

The licensed technology comprises broadly acting pan-viral inhibitory

compounds targeting multiple viral pathogens.

The technology was invented by UMB scientists Drs.

Matthew Frieman, Alexander MacKerell

and Stuart Watson.

The Company has also executed a Sponsored Research Agreement with UMB to support the development of the technology

under the direction of these inventors at UMB.

In addition, we are constantly seeking to grow

our pipeline of treatments in oncology indications.

For example, in January 2021, the Company invested in Convergent Therapeutics, Inc.,

which has exclusive rights to technology related to next-generation dual-action peptide receptor radionuclide therapy (“PRRT”)

for prostate cancer covered by multiple issued U.S.

and foreign patents.

Convergent is currently conducting advanced human trials relating

to prostate cancer treatments utilizing PRRT that targets the prostate-specific membrane antigen (“PSMA”) present on prostate

cancer cells.

The technology was developed under the direction of Dr.

Neil Bander, Professor of Urologic Oncology at Weill Cornell Medicine.

In addition, the Company was granted a license to four patent applications for the use of psilocybin in cancer indications.

Additionally, on January 6, 2021 the Company announced

that it entered into an exclusive patent license agreement with Silo Pharma Inc.

(“Silo Pharma”) pursuant to which Silo Pharma

granted the Company a worldwide exclusive, sublicensable, royalty-bearing license to certain Silo Pharma owned provisional patent applications

directed to the use of psilocybin in cancer treatment, and any patents issuing therefrom, including all continuations, continuations-in-part,

divisions, extensions, substitutions, reissues, re-examinations, and any applications and all patents issuing from any applications and

patents that claim domestic benefit or foreign priority to the provisional patent applications.

The license is for “Field of Use”

(as defined in the exclusive patent license agreement) of “treatment of cancer and symptoms caused by cancer, including but not

limited to pain, nausea, neuroinflammation, brain and neural dysfunction, depression, seizures, confusion, dizziness, numbness/tingling,

dysfunction of the senses and all other symptoms that are caused by cancer of any type.”

Critical Accounting Policies

Our critical accounting policies are disclosed

in our annual report on Form 10K for the year ended December 31, 2020 and there have been no material changes to such policy or estimates

during the three months ended March 31, 2021.

Recently Issued Accounting Pronouncements

See Note 3 to the condensed consolidated financial

statements for a discussion of recent accounting standards.

Results of Operations

Three months ended March 31, 2021 compared

to three months ended March 31, 2020

During the three months ended March 31, 2021,

we incurred a loss from operations of approximately $2.3 million, as compared to $2.4 million during the comparable prior year period.

The decrease in loss was primarily attributed to $13,000 decrease in research and development expense and $ $92,000 decrease in general

and administrative expenses, partially offset by $23,000 increase in research and development expense related with license acquisition.

During the three months ended March 31, 2021,

other expense was approximately $1.7 million as compared to approximately $5.9 million during the comparable prior year period.

loss per share went down from a decrease in net operating losses and a significant increase in the number of shares outstanding.

in other expense was primarily attributed to a $4.6 million lower loss in the change in fair value of investment in Hoth, and partially

offset by $0.5 million increase in losses on marketable securities.

The Company experienced very little or no revenue

in the last two years and we don’t expect any revenue until a biotechnology product is fully developed which may not occur for many

Liquidity and Capital Resources

We continue to incur ongoing administrative and

other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue.

We do not expect to incur

revenue until any of our biotechnology products are fully developed.

While we continue to implement our business strategy, we intend to

finance our activities through managing current cash on hand from our past equity offerings.

During the first quarter of 2021, the Company

consummated a public offering of 53,905,927 shares of common stock (including the underwriter overallotment).

The Company received net

proceeds of approximately $78.0 million after deducting underwriting discounts and commissions and estimated offering expenses payable

by the Company.

Therefore, the Company has adequate cash to fund its operations for at least the next twelve months.

Moving forward, the Company intends to manage

its cash through an investment committee focused on asset preservation and reasonable risk allocation.

Further, the Company intends to

grow its drug platform through additional licensing efforts that are similar to those the Company has already entered into and disclosed.

In addition, the Company is seeking partnerships with academic institutions and private enterprise to find, fund and advance new drug

compounds that can be brought to commercialization.

Management continues to evaluate the impact of

the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s consolidated financial position, results of its consolidated operations and/or search for drug candidates, the

specific impact is not readily determinable as of the date of these consolidated financial statements.

The consolidated financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Cash Flows from Operating Activities -

For the three months ended March 31, 2021 and 2020, net cash used in operations was approximately $1.1 million and $1.4 million, respectively.

The cash used in operating activities for the three months ended March 31, 2021 primarily resulted from a net loss of $4.0 million, and

partially offset by $2.0 million unrealized loss on marketable securities and $1.0 million research and development expense related with

license acquired.

The cash used in operating activities for the three months ended March 31, 2020 primarily resulted from a net loss of

$8.3 million, and partially offset by reduction in fair value of investment of $5.1 million and $1.0 million research and development

expense related with license acquired.

Cash Flows from Investing Activities -

For the three months ended March 31, 2021 and 2020, net cash used in investing activities was approximately $71.8 million and $17.2 million,

respectively.

The cash used in investing activities for the three months ended March 31, 2021 primarily resulted from our purchase of

marketable securities of $83.6 million and purchase of convertible note of $2.0 million, partially offset by our sale of marketable securities

of $14.3 million since we invest excess cash into marketable securities until additional cash is needed.

The cash used in investing activities

for the three months ended March 31, 2020 primarily resulted from our purchase of marketable securities of $20.4 million and research

and development expense related with license acquired of $1.0 million, partially offset by our purchase of marketable securities of $4.2

million since we invest excess cash into marketable securities.

Cash Flows from Financing Activities - Cash

provided by financing activities for the three months ended March 31, 2021 was $78.1 million, which reflects the net proceeds of $78.0

million from investors in exchange of issuance of common stock and warrants and net proceeds of $84,000 from the exercise of common warrants.

Cash provided by financing activities for the three months ended March 31, 2020 was $18.8 million, which reflects the net proceeds of

$6.5 from investors in exchange of issuance of common stock, common warrants and prefunded warrants, net proceeds of $5.1 from investors

in exchange of issuance of common stock, and net proceeds of $7.1 million from the exercise of common warrants and prefunded warrants.

Off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

required for smaller reporting companies.

Not required for smaller reporting companies.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements